War risk insurers withdraw cover for Red Sea insurance following deadly incident

Five of the world's largest protection and indemnity clubs are withdrawing part of their war risk coverage for passing the Bab al-Mandab Strait following the first deadly maritime attack in the region since renewed Houthi-Saudi tensions last month.

In web circulars published Aug. 12, London P&I, Skuld, Swedish Club, NorthStandard and the Shipowners' Club said their fixed-premium cover for war-related incidents in parts of the Indian Ocean, Red Sea and Gulf of Aden will be terminated in the coming days.

The technical move came after the P&I clubs' reinsurers cancelled the agreements to cover those trades amid rising maritime risks. In general practice, the coverage would be reinstated at higher rates once the clubs secure reinsurance following fresh negotiations, but seaborne trades could be disrupted temporarily during the process.

Since July 20, Yemen-based Houthi militants have been attacking ships in the Red Sea, which they claimed served Saudi trade, as the two countries' conflict re-escalates.

The Tanzania-flagged cargo ship Tihamah was hit by a projectile off the coast of Al Mokha, Yemen Aug. 11, leading to several seafarer fatalities, the International Maritime Organization said.

"It is particularly troublesome that the most recent attack has taken place in the Red Sea and Gulf of Aden area," the UN agency's secretary-general, Arsenio Dominguez, said in a statement Aug. 12.

"I reiterate my call for shipowners and ship operators to thoroughly assess risks before transiting this and other high risk regions and follow appropriate best management practices."

Yemen's UN-recognized government said three Pakistani and one Indonesian sailor were killed during the Houthi attacks. Yemeni Military Media, controlled by the Houthis, said the ship was transporting Saudi military equipment.